- Delivered strong revenue growth of 44% y/y in Q1’20, above
prior guidance range, with accelerating growth continued into April
across all annual cohorts
- Continued growth momentum across all key metrics, with active
buyers increasing 17% y/y, spend per buyer increasing 18% y/y, and
take rate increasing 90 basis points y/y
- Added over 30 new categories in Q1’20 and experienced
accelerating growth across all verticals in April
- Launched Promoted Gigs in five categories, and early results
show over 80% adoption rate and nearly 100% retention rate among
invited sellers
- Furthered the progress of international expansion with the
launch of fr.fiverr.com and the rollout of localized user generated
content. Revenue from non-English speaking countries now represents
32% of total revenue, up from approximately 30% in 2019
- Provided Q2’20 guidance and revised FY20 guidance upward -
revenue is now expected to grow 37-41% y/y in Q2’20 and 36-38% for
FY20 as global shelter-in-place provided strong tailwind for our
business
Fiverr International Ltd. (NYSE: FVRR), the company that is
changing how the world works together, today reported financial
results for the first quarter of 2020 ended March 31, 2020.
Complete operating results and management commentary can be found
by accessing the Company’s shareholder letter posted to its
investor relations website at investors.fiverr.com.
“I am immensely proud of the team at Fiverr and what they have
achieved in the first quarter, especially under the backdrop of a
global pandemic that has impacted the world in the last few
months.” said Fiverr founder and CEO Micha Kaufman. “Together, we
delivered a number of COVID-19 related initiatives to help our
community, introduced Promoted Gigs ahead of schedule, launched
full localization in Germany, Spain and France, and our marketing
strategy continued to power strong growth with agility and
efficiency. Our growth and financial results reflect the strength
and resilience of our marketplace even in a challenging global
environment.”
Ofer Katz, Fiverr CFO, added, “We are very happy with Q1 results
with strong topline growth, strong gross margin and significant
improvement in EBITDA. Built on these achievements, the visibility
inherent to our business model, and the tailwind we experienced in
recent weeks, we are providing strong guidance for the second
quarter of 2020 and revised our full year outlook upward from prior
guidance.”
First Quarter 2020 Financial Highlights
- Revenue in the first quarter of 2020 was $34.2 million, an
increase of 44% year over year.
- Active buyers as of March 31, 2020 grew to 2.5 million,
compared to 2.1 million as of March 31, 2019, an increase of 17%
year over year.
- Spend per buyer as of March 31, 2020 reached $177, compared to
$150 as of March 31, 2019, an increase of 18% year over year.
- Take rate for the year ended March 31, 2020 was 27.1%, up from
26.2% for the year ended March 31, 2019, an increase of 90 basis
points year over year.
- GAAP gross margin in the first quarter of 2020 was 80.0%, an
increase of 80 basis points from 79.2% in the first quarter of
2019. Non-GAAP gross margin in the first quarter of 2020 was 81.6%,
an increase of 60 basis points from 81.0% in the first quarter of
2019.
- GAAP net loss in the first quarter of 2020 was ($6.2) million,
or ($0.19) per share, compared to ($8.3) million, or ($1.26) per
share, in the first quarter of 2019. Non-GAAP net loss in the first
quarter of 2020 was ($2.6) million, or ($0.08) per share, compared
to ($5.2) million, or ($0.20) per share, in the first quarter of
2019.
- Adjusted EBITDA1 in the first quarter of 2020 improved to
($2.9) million, compared to ($5.4) million in the first quarter of
2019. Adjusted EBITDA margin was (8.4%) in the first quarter of
2020, an improvement of 1,430 basis points from (22.7%) in the
first quarter of 2019.
Recent Business Highlights
- Our business has continued to gain significant momentum since
we released our shareholder letter on April 8. The accelerating
growth trends were observed across all annual cohorts and across
all verticals in April.
- During Q1’20, we launched over 30 new categories and added
depth in certain popular areas such as online lessons and
offline-to-online services.
- We successfully launched Promoted Gigs on April 5 and reactions
from our seller community has been overwhelmingly positive with
over 80% adoption rate and nearly 100% retention rate. We are
seeing strong click-through rates and conversion rates from buyers
on those ad placements as well.
- We launched our French website, fr.fiverr.com, and rolled out
localized user generated content powered by machine translation on
all non-English websites. Year to date, revenue from non-English
speaking countries contributed to 32% of total revenue, up from
approximately 30% in 2019.
Financial Outlook
Given the strong momentum we have seen in recent weeks, we are
raising our full year 2020 revenue and EBITDA expectations from
prior guidance. However, given these unprecedented times and impact
of COVID-19 on economies globally, we will update business trends
as they evolve. We are also accelerating our timing to
profitability and target turning EBITDA positive in the second half
of 2021. We expect that our strong cash position, together with
revenue growth momentum and path to profitability, will allow us to
continue to make long-term investments to drive growth. Our outlook
for the second quarter and full year 2020 is as follows:
Q2 2020
FY 2020
Revenue
$35.5 - $36.5 million
$145.5 - $147.5 million
Year over year growth
37% - 41%
36% - 38%
Adjusted EBITDA
($2.5) - ($1.5) million
($9.0) - ($7.0) million
___________________________________
1
Adjusted EBITDA is a non-GAAP financial
measure. See “Key Performance Metrics and Non-GAAP Financial
Measure” for additional information regarding this and other
non-GAAP metrics used in this release.
Conference Call and Webcast Details
Fiverr will host a conference call to discuss its financial
results on Thursday, May 7, 2020 at 8:30 a.m. Eastern Time. A live
webcast of the call can be accessed from Fiverr’s Investor
Relations website. An archived version will be available on the
website after the call. Investors and analysts can participate in
the conference call by dialing (866) 360-3590, or (412) 317-5278
for callers outside the United States, and mention the passcode,
“Fiverr.” A telephonic replay of the conference call will be
available until Thursday, May 14, 2020, beginning one hour after
the end of the conference call. To listen to the replay please dial
(877) 344-7529, or (412) 317-0088 for callers outside the United
States, and enter replay code 10141807.
About Fiverr
Fiverr's mission is to change how the world works together. The
Fiverr platform connects businesses of all sizes with skilled
freelancers offering digital services in more than 300 categories,
across 8 verticals including graphic design, digital marketing,
programming, video and animation. In 2019, over 2.4 million
customers bought a wide range of services from freelancers working
in over 160 countries. We invite you to visit us at fiverr.com,
read our blog and follow us on Facebook, Twitter and Instagram.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
March 31,
December 31,
2020
2019
(Unaudited)
(Audited)
Assets Current assets: Cash and cash equivalents
$
28,210
$
24,171
Marketable securities
96,337
88,559
User funds
63,873
55,945
Bank deposits
15,000
15,000
Restricted deposit
324
324
Other receivables
2,871
3,117
Total current assets
206,615
187,116
Marketable securities
13,996
21,805
Property and equipment, net
5,379
5,321
Intangible assets, net
6,594
7,188
Goodwill
11,240
11,240
Restricted deposit
3,168
3,168
Other non-current assets
473
522
Total assets
$
247,465
$
236,360
Liabilities and Shareholders' Equity Current
liabilities: Trade payables
$
3,193
$
3,749
User accounts
60,151
53,013
Deferred revenue
4,258
3,248
Other account payables and accrued expenses
28,288
21,426
Current maturities of long-term loan
490
503
Total current liabilities
96,380
81,939
Long-term loan and other non-current liabilities
3,932
5,612
Total liabilities
100,312
87,551
Shareholders' equity: Share capital and additional
paid-in capital
311,096
306,334
Accumulated deficit
(163,918
)
(157,763
)
Accumulated other comprehensive income (loss)
(25
)
238
Total shareholders' equity
147,153
148,809
Total liabilities and shareholders' equity
$
247,465
$
236,360
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except loss per
share data)
Three Months Ended
March 31,
2020
2019
(Unaudited)
Revenue
$
34,150
$
23,763
Cost of revenue
6,820
4,936
Gross profit
27,330
18,827
Operating expenses: Research and development
9,974
7,616
Sales and marketing
18,221
15,376
General and administrative
5,590
4,356
Total operating expenses
33,785
27,348
Operating loss
(6,455
)
(8,521
)
Financial income, net
331
214
Loss before income taxes
(6,124
)
(8,307
)
Income taxes
(31
)
(6
)
Net loss
(6,155
)
(8,313
)
Deemed dividend to protected ordinary shareholders
-
(632
)
Net loss attributable to ordinary shareholders
(6,155
)
(8,945
)
Basic and diluted net loss per share attributable to ordinary
shareholders
$
(0.19
)
$
(1.26
)
Basic and diluted weighted average ordinary shares
32,076,421
7,071,884
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2020
2019
(Unaudited)
Operating Activities Net loss
$
(6,155
)
$
(8,313
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
965
807
Amortization of discount on marketable securities
(271
)
-
Shared-based compensation
2,762
1,746
Net loss (gain) from exchange rate fluctuations
194
(53
)
Changes in assets and liabilities: User funds
(7,928
)
(8,325
)
Other receivables
448
(1,247
)
Trade payables
(584
)
511
User accounts
7,138
8,325
Deferred revenue
1,010
-
Other account payables and accrued expenses
2,725
1,494
Non-current liabilities
(2
)
58
Net cash provided by (used in) operating activities
302
(4,997
)
Investing Activities Acquisition of business, net of
cash acquired
-
(9,967
)
Purchase of property and equipment
(131
)
(177
)
Capitalization of internal-use software
(285
)
(103
)
Other receivables and non-current assets
52
(122
)
Bank deposits
-
(10,000
)
Investment in marketable securities
(36,786
)
-
Proceeds from sale of marketable securities
37,088
-
Net cash used in investing activities
(62
)
(20,369
)
Financing Activities Proceeds from exercise of
options
1,948
56
Payment of deferred issuance costs related to IPO
-
(405
)
Proceeds from issuance of protected ordinary shares, net
-
4,340
Repayment of long-term loan
(120
)
(112
)
Tax withholding in connection with employees' options exercises
2,272
-
Net cash provided by financing activities
4,100
3,879
Effect of exchange rate fluctuations on cash and cash
equivalents
(301
)
168
Increase (decrease) in cash and cash equivalents
4,039
(21,319
)
Cash and cash equivalents at the beginning of period
24,171
55,955
Cash and cash equivalents at the end of period
$
28,210
$
34,636
KEY PERFORMANCE
METRICS
(Unaudited)
Three Months Ended
March 31,
2020
2019
(Unaudited)
Annual active buyers (in thousands)
2,450
2,103
Annual spend per buyer ($)
$
177
$
150
RECONCILIATION OF GAAP TO
NON-GAAP GROSS PROFIT
(in thousands, except gross
margin data)
Three Months Ended
March 31,
2020
2019
(Unaudited)
GAAP gross profit
$
27,330
$
18,827
Add: Share-based compensation
70
22
Depreciation and amortization
474
406
Non-GAAP gross profit
$
27,874
$
19,255
Non-GAAP gross margin
81.6
%
81.0
%
RECONCILIATION OF GAAP TO
NON-GAAP NET LOSS AND NET LOSS PER SHARE
(in thousands, except loss per
share data)
Three Months Ended
March 31,
2020
2019
(Unaudited)
GAAP net loss attributable to ordinary shareholders
$
(6,155
)
$
(8,945
)
Add: Deemed dividend to protected ordinary shareholders
-
632
Depreciation and amortization
965
807
Share-based compensation
2,762
1,746
Contingent consideration revaluation and acquisition related costs
(129
)
578
Non-GAAP net loss
(2,557
)
(5,182
)
GAAP weighted average number of ordinary shares outstanding - basic
and diluted
32,076,421
7,071,884
Add: Additional weighted average shares giving effect to exchange
of protected ordinary shares at the beginning of the period
-
18,654,270
Non-GAAP basic and diluted weighted average ordinary shares
32,076,421
25,726,154
Non-GAAP basic and diluted net loss per share attributable to
ordinary shareholders
$
(0.08
)
$
(0.20
)
Note: Non-GAAP basic and diluted net loss per ordinary share for
the first quarter ended March 31, 2019 were calculated based on
ordinary shares outstanding after accounting for the exchange of
Fiverr's then outstanding protected ordinary shares into 18.7
million ordinary shares as though such event had occurred at the
beginning of the period.
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA
(in thousands, except adjusted
EBITDA margin data)
Three Months Ended
March 31,
2020
2019
(Unaudited)
GAAP net loss
$
(6,155
)
$
(8,313
)
Add: Financial income, net
(331
)
(214
)
Income taxes
31
6
Depreciation and amortization
965
807
Share-based compensation
2,762
1,746
Contingent consideration revaluation and acquisition related costs
(129
)
578
Adjusted EBITDA
$
(2,857
)
$
(5,390
)
Adjusted EBITDA margin
(8.4
%)
(22.7
%)
RECONCILIATION OF GAAP TO
NON-GAAP OPERATING EXPENSES
(in thousands)
Three Months Ended
March 31,
2020
2019
(Unaudited)
GAAP research and development
$
9,974
$
7,616
Less: Share-based compensation
1,042
635
Depreciation and amortization
116
103
Acquisition related costs
-
47
Non-GAAP research and development
$
8,816
$
6,831
GAAP sales and marketing
$
18,221
$
15,376
Less: Share-based compensation
527
256
Depreciation and amortization
330
256
Acquisition related costs
121
288
Non-GAAP sales and marketing
$
17,243
$
14,576
GAAP general and administrative
$
5,590
$
4,356
Less: Share-based compensation
1,123
833
Depreciation and amortization
45
42
Contingent consideration revaluation and acquisition related costs
(250
)
243
Non-GAAP general and administrative
$
4,672
$
3,238
Key Performance Metrics and Non-GAAP
Financial Measures
This release includes certain key performance metrics and
financial measures not based on GAAP, including Adjusted EBITDA,
Adjusted EBITDA margin, Non-GAAP gross profit, Non-GAAP gross
margin, Non-GAAP operating expenses, Non-GAAP net loss and Non-GAAP
net loss per share as well as operating metrics, including GMV,
spend per buyer, active buyers and take rate. Some amounts in this
release may not total due to rounding. All percentages have been
calculated using unrounded amounts.
We define GMV or Gross Merchandise Value as the total value of
transactions ordered through our platform, excluding value added
tax, goods and services tax, service chargebacks and refunds. We
define active buyers on any given date as buyers who have ordered a
Gig or other services on our platform within the last 12-month
period, irrespective of cancellations. Spend per buyer on any given
date is calculated by dividing our GMV within the last 12-month
period by the number of active buyers as of such date. Take rate is
revenue for any such period divided by GMV for the same period.
Management and our board of directors use these metrics as
supplemental measures of our performance that is not required by,
or presented in accordance with GAAP because they assist us in
comparing our operating performance on a consistent basis, as they
remove the impact of items not directly resulting from our core
operations. We also use these metrics for planning purposes,
including the preparation of our internal annual operating budget
and financial projections, to evaluate the performance and
effectiveness of our strategic initiatives and to evaluate our
capacity to expand our business.
Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP gross profit,
Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP net
loss and Non-GAAP net loss per share as well as operating metrics,
including GMV, spend per buyer, active buyers and take rate should
not be considered in isolation, as an alternative to, or superior
to net loss, revenue, cash flows or other performance measure
derived in accordance with GAAP. These metrics are frequently used
by analysts, investors and other interested parties to evaluate
companies in our industry. Management believes that the
presentation of non-GAAP metrics is an appropriate measure of
operating performance because they eliminate the impact of expenses
that do not relate directly to the performance of our underlying
business.
These non-GAAP metrics should not be construed as an inference
that our future results will be unaffected by unusual or other
items. Additionally, Adjusted EBITDA and other non-GAAP metrics
used herein are not intended to be a measure of free cash flow for
management's discretionary use, as they do not reflect our tax
payments and certain other cash costs that may recur in the future,
including, among other things, cash requirements for costs to
replace assets being depreciated and amortized. Management
compensates for these limitations by relying on our GAAP results in
addition to using Adjusted EBITDA and other non-GAAP metrics as
supplemental measures of our performance. Our measure of Adjusted
EBITDA and other non-GAAP metrics used herein is not necessarily
comparable to similarly titled captions of other companies due to
different methods of calculation.
We are not able to provide a reconciliation of Adjusted EBITDA
guidance for the second quarter of 2020, the fiscal year 2020 or
the fiscal year 2021 to net loss, the comparable GAAP measure,
because certain items that are excluded from Adjusted EBITDA cannot
be reasonably predicted or are not in our control. In particular,
we are unable to forecast the timing or magnitude of share based
compensation, amortization of intangible assets, and gain or loss
on revaluation of contingent consideration, as applicable without
unreasonable efforts, and these items could significantly impact,
either individually or in the aggregate, net loss in the
future.
See the tables above regarding reconciliations of these non-GAAP
measures to the most directly comparable GAAP measures.
Forward Looking
Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements contained in this release that do not relate to
matters of historical fact should be considered forward-looking
statements, including, without limitation, statements regarding our
expected financial performance and operational performance for the
second quarter of 2020, the fiscal year ended December 31, 2020 and
the fiscal year ended December 31, 2021, as well as statements that
include the words “expect,” “intend,” “plan,” “believe,” “project,”
“forecast,” “estimate,” “may,” “should,” “anticipate” and similar
statements of a future or forward-looking nature. These
forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees,
but involve known and unknown risks, uncertainties and other
important factors that may cause actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to: our
ability to attract and retain a large community of buyers and
freelancers; our ability to achieve profitability; our ability to
maintain and enhance our brand; our dependence on the continued
growth and expansion of the market for freelancers and the services
they offer; our ability to maintain user engagement on our website
and to maintain and improve the quality of our platform; our
dependence on the interoperability of our platform with mobile
operating systems that we do not control; our ability to
successfully implement our business plan during a global economic
downturn caused by the COVID-19 pandemic that may impact the demand
for our services or have a material adverse impact on our and our
business partners’ financial condition and results of operations;
our ability and the ability of third parties to protect our users’
personal or other data from a security breach and to comply with
laws and regulations relating to consumer data privacy and data
protection; our ability to detect errors, defects or disruptions in
our platform; our ability to comply with the terms of underlying
licenses of open source software components on our platform; our
ability to expand into markets outside the United States; our
ability to achieve desired operating margins; our compliance with a
wide variety of U.S. and international laws and regulations; our
ability to protect our intellectual property rights and to
successfully halt the operations of copycat websites or
misappropriation of data; our reliance on Amazon Web Services; our
ability to mitigate payment and fraud risks; our dependence on
relationships with payment partners, banks and disbursement
partners; our dependence on our senior management and our ability
to attract new talent; and the other important factors discussed
under the caption “Risk Factors” in our annual report on Form 20-F
filed with the U.S. Securities and Exchange Commission (“SEC”) on
March 31, 2020 as such factors may be updated from time to time in
our other filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov. In addition, we operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on its business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements that we may make. In light of these
risks, uncertainties and assumptions, the forward-looking events
and circumstances discussed in this release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. In
addition, the forward-looking statements made in this release
relate only to events or information as of the date on which the
statements are made in this release. Except as required by law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005274/en/
Investor Relations: Jinjin Qian investors@fiverr.com Press:
Siobhan Aalders press@fiverr.com
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